Scientologists prepare to seek charity status

The self-styled Church of Scientology, one of Britain's most controversial cults, is attempting to turn itself into a charity.

Last week three senior figures from the group's headquarters in Sussex formed a company to administer the American-based organisation's burgeoning British business interests.

In its articles of association, the new company, Church of Scientology (England and Wales), describes its business activities as entirely charitable and undertakes that the new charity's trustees will comply with the terms of the 1993 Charities Act.

It also promises to submit annual accounts to the Charity Commissioners for England and Wales, the official regulator.

But under the terms of British law the Church of Scientology does not qualify for charity status. "The Church of Scientology is not a charity," Hugh Rogers of the Charity Commissioners said last week. "But as they have taken the trouble to register a new company to pursue what they consider to be charitable religious activities, we would expect a formal application from them quite soon."

Their chances of success, however, are slim. The Church of Scientology made an informal approach to the Commissioners last year to discover whether or not Scientology could be accepted as a religion.

In a statement issued at the time the Commissioners noted: "The Commission, having carefully considered the submission in the light of such authorities as there are in English law, concludes that Scientology does not meet the test of a religion as propounded in English law, namely, of being founded on belife in and worship of a deity."

The Scientology movement was founded in 1950 by the American science- fiction writer Lafayette Ronald Hubbard, who once claimed to have visited Venus. Scientologists reject the orthodox doctrines of the Bible and ban members from entering churches.

Since 1977 the sect has been able to exploit a legal lacuna and avoid paying UK taxes. It did this by ensuring that its headquarters, Saint Hill Manor at East Grinstead, Sussex, was classified as a religious education college, incorporated in Australia where the cult is regarded as a bona fide church and pays no tax.

The cult's leaders have been able to obtain tax exemptions on rents, dividends, donations, grants, gifts and profits.

Accounts at Companies House reveal that the Scientologists paid no tax in Britain for years despite owning properties worth pounds 8m and having a declared annual income of pounds 6m.

But now cult watchers believe the Scientologists are craving the respectability of British Registered Charity status. Some City sources have speculated that the cult may have attracted the attention of Inland Revenue inspectors. A spokesman for the Inland Revenue, however, refused to confirm or deny this.

A Scientologist spokesman, Graham Ryder, said that the church had expanded so greatly, gaining more than 3,000 new members a year, that it felt it was time to set up its own company.

In June the Scientologists succeeded in getting a ban on their TV advertising lifted. "This latest development gives us further cause for concern," said Graham Baldwin, director of Catalyst,which provides counselling for cult victims and their families.

"It is high time the authorities took a close look at the Scientologists' tax affairs. They are the only church I know of that is registered for VAT, and how they can describe themselves as charitable is beyond me."